Thanks to the Banks

I’m thankful I’m not over-extended in my financial obligations. Well, sort of. Got plenty to pay back. I could use some oil money.

Maybe not. Dubai World is looking to the banks that lent them billions to hold off a little bit, according to yesterday’s New York Times:

The government of Dubai, in a blunt acknowledgment of the severity of its financial position, said on Wednesday that it had asked its banks for a six-month stay on its schedule of debt repayments.

The terse statement came in the middle of negotiations between creditors and Dubai World, the corporate arm of Dubai, which has led many of its most ambitious real estate projects, but is now struggling under the burden of $59 billion in liabilities.

For the banks that financed the debt-fueled ascent of Dubai — analysts’ estimates put its total debt at about $80 billion — the move by Dubai to obtain a standstill highlights a truth that many in the region had been trying to make clear to bankers. It is that Abu Dhabi, the oil-rich governing emirate of the United Arab Emirates, will not unconditionally bail out its more profligate neighbor. Instead, a genuine restructuring of Dubai’s debt, with pain being shared equally between Dubai and its bankers, needs to take place.

Try doing that with your credit cards. One by-product of this crazy borrow-and-spend oil economy is the world’s tallest building, the Burj Dubai. Check out this view from the top…

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Jetsons in Abu Dhabi

Sitting atop a tenth of the world’s crude oil supply, Abu Dhabi is building a “green” city that will be car-free and people will get around in PRTs (personal rapid transit).

Visitors to the future Masdar City will have no choice but to do what the Masdarans do – leave their cars outside the city and use PRT.

Personal Rapid Transit automotives will be the only means of transport in the planned zero-carbon and zero-waste city taking shape just outside Abu Dhabi as one of cleanest and most environment-friendly habitats in the world.

Inhabitants and visitors need not worry about taxi shortages in town. Nearly 2,000 PRTs will serve Masdar’s 50,000 citizens inside the city, which is designed to be free of cars and any other polluting machines.

The computerised, battery powered pods just need to be told where to go and they just head straight to the required destinations.

The vehicles can travel at around 40kph through a maze of roads inside Masdar and can carry four adults and two children.

Passengers will not have to waste time telling the driver where they are heading as the pod has no driver. They just press a tiny button on the computerised screen inside the small vehicle to tell the machine about their destination.

The Masdar Initiative is a huge project:

Masdar, which means “the source” in Arabic, complements the vision of the late Sheikh Zayed Bin Sultan Al Nahyan, the founder and the former President of the UAE, who pioneered environmental conservation in the country. It aims to become the source of energy, knowledge and innovation in order to position Abu Dhabi as a global new energy leader. Masdar is committed to the optimum use of natural and human resources so that Abu Dhabi can develop into a global centre of excellence for renewable energy research, development, and innovation.

Masdar is currently building a zero carbon, zero waste city, investing in a range of new energy technologies, establishing a post-graduate research institution and developing a carbon management unit. All these activities, and a range of other initiatives, are aimed at laying the groundwork for vital and sustainable new industries.

Reminds me of the Saudi Arabian project on the Red Sea, Jazan Economic City. Both will be interesting to see rise up out of the desert — just as Las Vegas did years ago.